Alumis, Inc.

Trium plans to vote against the merger.\n An investor is ratcheting up the pressure on Acelyrin to pull out of a planned merger with Alumis, setting out its case for voting against a deal it argues is worse for shareholders than liquidating the biotech.Trium Capital, a U.K.-based investor, built a 5.4% stake in Acelyrin earlier this year. At the time, Trium said it planned to talk to Acelyrin’s management about the merger. Trium has since discussed the merger with Acelyrin and Alumis, the investor said in an open letter, but still has concerns about the deal. With two weeks to go until Acelyrin shareholders vote on the merger, Trium has gone public with its worries (PDF).“We believe all the offers received by [Acelyrin] thus far are inferior to a winding down of the company and returning capital to shareholders,” Trium said. “A liquidation of the company provides certainty of value well above the value from any of the offers. We believe there is no reason for shareholders to accept any transaction that provides upfront value less than value that can be expected in a liquidation.”The offers received by Acelyrin include Concentra Biosciences’ attempt to buy the biotech for $3 a share. Acelyrin rejected that takeover bid in March. Tang Capital Partners, an investment firm that has made its name trying to buy and shutter floundering biotechs, owns Concentra.  Trium calculated Acelyrin shareholders will receive between $3.53 and $3.67 per share if it liquidates. The calculation is based on Acelyrin’s cash, which Trium puts at $4.45 a share. Trium assumed lonigutamab, Acelyrin’s thyroid eye disease candidate, has no value and the liquidation incurs substantial costs when forecasting shareholder returns. The investor said Alumis’ merger implies a $2.06 per share valuation. Acelyrin discussed the merits of liquidating in paperwork it sent to investors. According to the biotech, “the added time and costs required to wind down ... operations in an orderly fashion” and the need to hold back “a meaningful amount” of cash to cover “known and potential unknown liabilities” meant that liquidating was not reasonably likely to create greater value for shareholders than the merger. Trium was dismissive of Acelyrin’s assessment. The investor said Acelyrin only considered winding down late in the process, adding that there “appears to be no serious analysis done by the board or its financial advisor.” Trium called Acelyrin’s process “inexplicable.” Based on its concerns, Trium plans to vote against the merger when Acelyrin puts the proposal to shareholders on May 13. 

iStock, Besiki Kavtaradze It’s been a fraught road for the proposed merger between Acelyrin and Alumis, with Tang Capital’s Concentra Biosciences in February threatening to upend the deal with a proposed $3-per-share acquisition of Acelyrin. In February, two California-based biotechs, Acelyrin and Alumis, announced that they would merge. Now, England-based Trium Capital, a significant Acelyrin shareholder, will vote against the planned merger, the investment firm announced in a letter dated April 28th. Trium contends that Acelyrin has better strategic options than the merger, which it says undervalues the biotech. “It is unclear to us why Acelyrin should accept a consideration that is so substantially less than its cash value,” the letter reads. Acelyrin’s shareholders “should not have to accept” this discount. The investment firm also took aim at Acelyrin’s board of directors. “The board attempts to justify the merger by contrasting the merger with Acelyrin’s supposedly meagre standalone prospects” and by arguing that the biotech would continue to trade poorly, Trium said. “This is a false choice,” the investor continued, noting that the recent buy offer from Tang Capital’s Concentra Biosciences proves that the biotech could be worth much more than the Alumis deal. Concentra in late February came in between the planned merger, offering to scoop up Acelyrin for $3 per share, which would total about $300 million, versus its trade price of $2.17 at the previous day’s market close. Concentra also tacked on a contingent value right to its offer, which would have given Acelyrin’s shareholders 80% of net proceeds from out-licensing deals or asset sales. Acelyrin not only rebuffed the offer a few days later—arguing that Concentra’s proposal “is not reasonably expected to result in a superior” deal to the merger—but the biotech also considered Concentra a hostile entity. In mid-March, Acelyrin adopted what is called a poison-pill defense , ensuring that its stockholders would be able to purchase additional shares at a steep discount in the event that any investor tries to stage a takeover. Concentra’s proposal “is over 50% higher than where Acelyrin traded prior to announcement of the Alumis merger,” Trium noted. “Acelyrin will have levers to deliver value to shareholders in the absence [of] a transaction.” One such lever, which Trium also says is preferable to the merger, is to wind down Acelyrin’s operations, liquidate its assets and return them to shareholders. Such a move, according to the investor, “provides certainty of value well above the value from any of the offers received thus far.” Acelyrin and Alumis inked their all-stock merger agreement in February, under which terms Alumis will absorb Acelyrin. The combined entity will be headed by Alumis’ current executive leadership. Acelyrin stockholders will own 45% of the post-merger company. Acelyrin’s stockholder meeting is scheduled on May 13 , at which time shareholders will vote on the proposed merger. According to an SEC filing , the new company would have about $737 million in cash to take it into 2027, beyond several expected data readouts. That includes a current Alumis Phase III trial for plaque psoriasis and a Phase IIb trial in systemic lupus erythematosus.

A shareholder of immune drug developer Acelyin believes the company is better off shutting down and returning cash to shareholders rather than pursuing a merger with fellow biotech Alumis.Trium Capital, an England-based investment fund and Acelyrin stockholder, revealed in a regulatory filing Tuesday that it intends to vote against the planned merger after concluding its not in the best interest of shareholders. In a letter to Acelyrins board dated April 28, the firm instead argued that Alumis offer, as well as others Acelyrin has considered, are inferior to what equity holders would receive if Acelyrin were to liquidate its assets.We believe there is substantial upside to winding up the company as compared to the proposed merger, Trium portfolio manager Felix Lo wrote in the letter.Triums filing comes amid heightened investor scrutiny of companies that, like Acelyrin, have suffered a setback and are worth less than their cash holdings. These biotech zombies typically pivot to a different strategy or merge with another drugmaker. Increasingly, investors have argued their cash should be put to better use. Multiple activist firms have pressured company boards in recent months and one biotech, Third Harmonic Bio, approved a liquidation plan two weeks ago.Acelyrin debuted on Wall Street in 2023 after raising $540 million in one of biotechs largest initial public offerings. But disappointing study results led the company to abandon development of the drug at the heart of that offering the following year. A second therapy that became its focus also hasnt entirely impressed, leaving the company with a depressed stock price.Acelyrin has pursued other strategic options. Trium noted how the company formed a special transaction committee and began evaluating offers, contacting over 25 parties and considering a variety of different deals. That process culminated with an announcement in February that the company planned to merge with Alumis.The planned deal is an all-stock transaction that would leave Acelyrin shareholders with about 48% of the combined company, giving them a stake in a company with a bigger cash balance and three drugs in clinical testing. The companies already amended deal terms to give Acelyrin shareholders more equity, with board chair Bruce Cozadd noting in a statement last week that he changes reflected discussions with shareholders.Acelyrin was also pursued by Tang Capital Partners, which has acquired some struggling companies and bought up shares in others in bids to liquidate them. But Acelyrin rebuffed Tangs efforts, adopted a poison pill to protect itself and threw support behind the Alumis deal instead.In its letter, Trium argued Tangs bid, as well as a wind down of the company, would both be better outcomes for shareholders than an Alumis deal that values Acelyrin at less than its cash holdings and carries more risk. The firm also contended Acelyrin failed to discuss such a scenario until early 2025 and, even then, didnt seriously consider it.A liquidation of the company provides certainty of value well above the value from any of the offers received thus far and will allow shareholders to re-invest the proceeds as they see fit, Lo wrote. We believe there is no reason for shareholders to accept any transaction that provides upfront value less than value that can be expected in a liquidation.Acelyrin shares trade at about $2.50 apiece. Its net cash reserves of $448 million as of the fourth quarter of 2024 were worth $4.45 a share, Lo noted.Concentra Biosciences, an entity controlled by Tang, had bid $3 per share in cash as well as the right to 80% of the proceeds if Concentra were to license or sell the companys programs. '